By Decrypt

For a while on Friday morning it looked as though the GameStop share price might rise high enough to make Keith Gill (better known as Roaring Kitty and DeepFuckingValue) into a billionaire before markets had even opened in the U.S.

The meme stock trader and financial influencer has been sharing screenshots of his massive GME position in the Superstonk subreddit. And if GME had made it all the way to $65, the position that started with a $116 million investment would have ballooned to be worth $1 billion.

But GameStop, which has become the quintessential meme stock, released its Q1 earnings report four days early just before the bell. It’s wasn’t a complete surprise, the company released its preliminary Q1 results last month. Now just a few hours into trading, the stock has plummeted by 30% and has traded as low as $32.40 on Friday.

Investors will still need to wait until next week to hear from GameStop execs, though. The GameStop press release was clear: “The Company will not be holding a conference call today.”

The U.S. video game retailer reported $881 million in net sales, down 29% from $1.2 billion the same time last year. That drop in sales was more severe than predicted by Wall Street analysts.

It wasn’t all bad news. GameStop saw its Q1 losses drop from $51 million this time last year to $32 million. The company also noted that its liabilities have decreased from $1.3 billion to $848 million and its cash and cash equivalents are little changed compared to last year.

The company also provided an update on its stock sale. GameStop said in May that it planned to sell 45 million shares. The video game retailer has now said it will sell an additional 75 million in addition to its previous sale, through which it raised $933 million, according to a prospectus filed with the SEC.

But the meme stock fans on the Superstonk subreddit appear undeterred.

One Reddit member shared a screenshot of a popular 2022 tweet from Larry Cheng, co-founder of Volition Capital, and a GameStop board member. In it, he shared his theory that corporations erode trust when they share potential good news early and actual bad news late. But that a company can build trust with investors by sharing potential bad news early and making sure good news arrives on time.

Another user guessed that it could be to make way for the new share offering.

“Maybe they want to clear the deck for another share offering,” they wrote. “With the official earnings out of the way, the quiet period ends and insiders can buy as well.”

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Source: Decrypt